Average Cost of Car Insurance: Everything You Need to Know

How much is the cost of average car insurance in the United States? Finding the answer can be challenging. Rates will vary depending on where you live, the type of vehicle you drive, your age, the type of coverage you need, and several other factors as well.

How much is the cost of average car insurance in the United States? Finding the answer can be challenging. Rates will vary depending on where you live, the type of vehicle you drive, your age, the type of coverage you need, and several other factors as well. When seeking quotes, you'll need to have all your important information on hand.

Make, model, and vehicle identification number for vehicles you're wanting to insure

Having all this information readily available will make the process of finding out how much car insurance is going to cost much faster.

Do You Need to Have Car Insurance?

Almost every state in the U.S. requires anyone who owns and operates a motor vehicle to have some sort of car insurance. Although there are a few states that do not require you to carry car insurance, you will still be held liable for any accident where you are at fault. So even in those states, it's still a good idea to have some sort of car insurance.

What Are the Components of Car Insurance?

There are several components that will make up your insurance policy, depending on the type of coverage you opt for.

Liability

Collision

Comprehensive

Personal Injury Protection

Uninsured Motorist

Each of these components have their advantages and disadvantages for drivers. The advantage of liability coverage is that when someone is injured or property is damaged, and you are at fault, the costs will be covered. However, the disadvantage of this coverage is that your vehicle and property may not be covered. This is where having collision coverage comes in handy. It will cover damages to your vehicle. If your vehicle is older, it might not be worth the extra cost.

Comprehensive coverage will help to pay for damages that aren't related to an accident with another driver; hitting a deer, hail storm damage, theft, or other unexpected occurrences. Having both comprehensive and collision coverage is usually referred to as having full coverage, and this type of coverage is not usually required by law. If you're in an accident in which you or your passengers are injured, personal injury protection will cover it, no matter who is at fault.

Although insurance is usually required, not every driver carries it as they should. This is when having uninsured motorist coverage is necessary. It will help cover the costs incurred by an accident if the other party does not have the insurance coverage needed to pay for damages.

Average Costs of Car Insurance

Despite the fact that there are many contributing factors to determining car insurance costs, The Zebra has compiled data from various sources to determine some averages. As of 2019, people were paying an average of $125.16 a month in the U.S or $1,502 per year. For those that pay every six months, the average cost for insurance will be about $751.

The state you live in will also play a role in determining the amount you will pay for your car insurance. Some states are more expensive than others, and the National Association of Insurance Commissioners has gathered data on this to help you find an average price for the state in which you live. Some of the most expensive states to get car insurance in are Louisiana, which averages $1,405.36; New Jersey, which averages $1,382.79; Michigan, which averages $1364; New York, which averages $1,360.66; and Washington D.C., which averages $1,330.73.

For the least expensive states, you're going to find Idaho at $679.89, Iowa at $702.46, Maine at $703.82, Wisconsin at $737.18, and Indiana at $755.03 on the list. Why are some states less expensive than others? Typically, the main reason is population density. However, traffic and crime/theft rate also contribute to how much you will pay on average for car insurance in your state.

Your age is another factor that contributes to the price you will pay for insurance. For example, if you are an unmarried 30-year-old woman who lives in Minnesota, a state that is in the middle when it comes to the average cost of insurance, you will likely find your quote somewhere in the $1136 per year range. However, if you are an 18-year-old male college student trying to get insurance for the first time, you will find yourself paying a higher rate, even in the same state.

Another contributing factor to the cost of insurance is the type of vehicle you drive. The make and model of your vehicle are important contributors to how much average car insurance will be for you. AAA's Your Driving Costs study in 2018 found that the least expensive insurance could be found for a small SUV, while the most expensive insurance would be for a small sedan. On another note, buying a more expensive or safer car does not necessarily mean you will pay less for insurance, and comprehensive coverage could end up costing more on a high-end vehicle.

The insurance company you choose to provide you with coverage is also going to affect the cost. The popular provider State Farm has some of the least expensive rates, while Liberty Mutual, another popular option, has some of the highest premiums.

Car Insurance Discounts

Luckily, there are a number of discounts available to help you save money on your car insurance. Make sure you discuss these with your insurance provider to ensure you're receiving any that you qualify for.

Safe driver discount: This is available to drivers that have a history of safe driving, meaning they haven't been involved in an accident or have taken a driver's education course.

Safety and security equipment discount: If you have installed any anti-theft devices, such as an alarm, you could qualify for this discount.

Fraternity, sorority, university, and alumni discount: Being associated with any of these organizations could result in premium discounts.

Bundling products: Some insurance companies that offer a variety of insurance products, like homeowners and life insurance, offer discounts if you purchase multiple policies through them.

Paying premiums annually: Most people pay their insurance monthly because it seems like a smaller amount upfront. However, by paying your entire premium once a year, you can actually end up saving money.

Determining the amount you will pay for your car insurance isn't always easy. Use this information to help you get what you need and find an insurance policy and company that's right for you.

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